The accommodation is something that many value highly and Swedish households are today willing to place a large proportion of their disposable income on their home. The housing cost is the single largest expense for the Swedish households today.
Accommodation in rented premises puts on average 30% of their income on the accommodation. The corresponding figure for tenant owners or homeowners is about 20% on average (source Boverket.se ). The cost of those who own their housing is mostly interest expense on mortgages.
Mortgage to villa and apartment
The housing and tenant-owner prices in big cities have increased a lot in recent decades. The average price of a villa in Sweden is over SEK 2.2 million and tenant-owned apartments are bought and sold for an average of SEK 1.5 million (source Mäklarstatistik.se ). The vast majority must therefore take a mortgage loan in order to be able to buy their home.
A mortgage loan is signed with the home, the villa or the condominium, as security for the loan. You can borrow up to 85% of the value of your home in a mortgage loan, the mortgage ceiling.
This part is traditionally called bottom loans and is considered by the bank as a relatively safe lending. This means that the loan interest rate is often low compared to other types of loans.
If you need to borrow more than 85%, a private loan / unsecured loan is added and therefore a higher interest rate. In order to be granted such a loan, the bank looks at your personal finances and makes an individual risk assessment.
To think about at home loans
When you sign a home loan, there are several important factors to take into account. Start by making an accommodation calculation . By keeping track of income and expenses, you get a better overview of your finances.
When you then borrow, it is important to find the bank that can give you the best conditions. Since the mortgage loan will be a central part of your household’s finances, it is well worth the time to bring in quotes from several different banks and lenders.
Start by going to the banks you are not a customer of today and see what they are willing to offer if you become a new customer. Then go back to your bank and negotiate interest and terms. You can save thousands of dollars a year!
It is common for you to pay off part of your mortgage. Amortization is to be considered as a type of savings and gives you significantly better returns on your assets than a traditional savings account.
Amortization can be done in two different ways – straight repayment or annuity. Straight amortization means that you repay the same amount on each payment occasion. The interest portion will thus be less and less as the debt decreases.
In an annuity loan, the sum of interest and amortization is the same all the time, which over time means that the amortization part becomes larger as the interest portion decreases.
Apply for the mortgage over the Internet
Today it is easy to apply for mortgages directly online. In the case of a loan application, data on income, family relationships, other debts and other matters that concern the household’s finances are required. An object description and market valuation from the real estate agent must also be submitted. After that, the bank makes a trial and announces whether a mortgage can be granted or not.
As of January 2015, new, tougher requirements regarding mortgage repayment are introduced. All new mortgages will then be amortized down to 50% of the housing value. For loans between 70-85%, amortization shall be made at 2% per year. For loans between 50-70%, the amortization rate should be lower and amount to 1% per year.
Amortization can be seen as a form of saving and provides a safer economy. In the event of unforeseen events, the margins in the private economy are greater for those who have a lower debt level.
More reading about home loans
- Top loans and bottom loans
- Tax deductions at mortgages
- Bridge loans
- Factors that affect your mortgage rate
- Skandiabanken allows you to calculate your discount yourself